Value Investing and other odds and ends

I thought that I would look back at some of my past investments, before I started my blog and before I began to journal the investment thesis for purchases I make, and document some of my reasons for the purchase, and the outcome. Of course I’m working on an outcome bias here, but I think it’s worth writing out some history lessons that I should keep in mind as I look for future businesses to invest in the future. The first look back will be one of the best investment returns I have made by investing in Marvel Enterprises in the early 2000’s. I believe that everyone is familiar with Marvel Studios and the many movies that have been released over the past decade involving many of the Marvel superheroes. The company is now a division of Disney, but at one point in time they were a public company and even declared bankruptcy. That may be shocking since the current situation is going very well for Marvel Studios, especially with the recent release of Deadpool. I’ll admit, I love finding turnaround companies and think the outcome can be very profitable if the right situation lends itself in the market. Many…

Our conclusion is that, with few exceptions, when a management with a reputation for brilliance tackles a business with a reputation for poor fundamental economics, it is the reputation of the business that remains intact – Warren Buffett Turnarounds seldom turn. – Warren Buffett I’ll admit that I am interested in finding companies that are in a turnaround. I feel that if I can locate a company that will be successful, it will result in a high return on my investment. However, if you are experienced in the markets, or have worked for a company that is in a downward trend, you’ll know that it is very hard to turn a company around. I have worked for a company that I would classify as in a “death spiral” where revenue and profit are continually decreasing and it is very hard to change the course. This usually happens with a company that is in a market in decline and being overtaken substitute products or companies thus eliminating any advantages that the company had been relying upon. So, how come I hunt in territories where Warren Buffett and others have warned investors against? Because for one, I think that it is an…